Gas prices in North Korea have jumped since China stopped selling to Pyongyang

A bus carries passengers in Pyongyang. Damir Sagolj/Reuters Diesel and gasoline prices in North Korea have jumped since China National Petroleum Corp (CNPC) halted sales of fuel to Pyongyang, Reuters reported on Monday, citing data on prices collected by North Korean defectors.

At the end of last month, reports emerged that CNPC, the main supplier of diesel and gasoline to North Korea, has suspended fuel sales to North Korea because it is worried that it may not receive payments.

North Korea imports all the oil and oil products it consumes—mostly from China—and a prolonged suspension by CNPC would choke out supplies at a time when the international community is increasing pressure on North Korea to stop its nuclear and missile ambitions, and is intensifying checks over Chinese business relations with Pyongyang.

According to a Reuters analysis of data by the Daily NK website—which is run by North Korean defectors who collect price data via phone calls with fuel traders in North Korea—private dealers in the north were selling gasoline at US$2.18 per kilogram, or US$2.92 per liter, as of July 5, a 50-percent surge compared to US$1.46 per kg on June 21. Gasoline prices fell slightly to US$2.05 per kg by July 12, but still, they were more than double compared to prices at the beginning of the year, Reuters' analysis of the data shows.

Diesel prices jumped by 20 percent in the three weeks to July 12. After the initial price surges in early July, prices of both diesel and gasoline have stabilized, probably because North Korea has encouraged fuel smuggling across the Chinese border, according to defector Kang Mi-jin who is in communication with traders in North Korea.

"After North Korea's frequent missile tests including its very first ICBM test, the international community has vowed to tighten sanctions and China simply cannot exclude itself from the recent movement, although it probably does not want to indefinitely cut off fuel sales to the North," Kang told Reuters.

China said in February that it was suspending until the end of this year all imports of coal from North Korea as part of its effort to implement United Nations Security Council sanctions aimed at stopping the country's nuclear weapons and ballistic-missile program. In April, gas prices in North Korea jumped on reports that China may be mulling an oil embargo.